The Cyprus news highlights what many investors would like to forget – that the region’s debt problems are ongoing, that they’re getting worse and more widespread, and that a solution continues to be elusive.

For many traders, this means economic growth in Europe will continue to teeter on the brink of a recession and demand for copper-laden goods like cars, phones, laptops and good old plumbing will continue to be lackluster.

This adds to what was already a growing worry among copper traders: China.

The second, and bigger, factor weighing on copper is China. While many anticipated a spring rebound in China’s copper purchases, no such uptick has been observed. Instead, Beijing announced plans to introduce new curbs on speculation in China’s property market, which drives about 20% of the country’s copper demand….

As China curtails its copper purchases, more and more copper is piling up in warehouses supervised by the London Metal Exchange and the Shanghai Futures Exchange. LME warehouses saw an inflow of a “whopping” 18,100 metric tons of copper Monday, said INTL FCStone’s senior commodity analyst Edward Meir, with current stocks at 543,925 tons.

The takeaway: Unlike in the buoyant stock market, the slightest bit of bad news is enough to weigh on copper’s price. iPath Dow Jones UBS Copper Subindex Total Return ETN (JJC) dropped 3% to $42.68 on Monday, including a dip to intraday lows not seen since August.

About Focus on Funds

As exchange-traded funds and other investing vehicles have ballooned in number, the task of figuring out what works well and what doesn’t has only gotten harder. Barrons.com’s Focus on Funds looks under the hood of ETFs, mutual funds and hedge funds for overlooked values, actionable ideas and the latest pitfalls for fund investors.

Chris Dieterich has covered the U.S. stock market for The Wall Street Journal and Dow Jones Newswires. He is a graduate of Regis University and the Missouri School of Journalism.